M/s. NSL Sugars Limited, Bangalore V. Deputy Commissioner of Income - Tax, Circle - 5(1)(1), Bangalore

ITA 597/BANG/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6952 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 26-03-2019

Judgement Text

ITA NOS.597, 598 & 772(B)/20 19 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES : B, BANGALORE BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SMT.BEENA PILLAI, JUDICAL MEMBER ITA NOS.597 & 598(BANG)/2019 (ASSESSMENT YEARS : 2011 - 11 & 2011 - 12) M/S NSL SUGARS LTD . , NO.60/1, 2 ND CROSS, R E SIDENCY ROAD, BANGALORE - 560 0 2 5 PAN NO.AA G C S0938Q APPELLANT VS THE DY. COMMISSIONER OF INCOME TAX, CIRCLE - 7(1)(1), BANGALORE RESPONDENT ITA NO. 772 (BANG)/201 9 (ASSESSMENT YEAR : 2013 - 14 ) (BY REVENUE) APPELLANT BY : SHRI V.CHANDRASHEKAR, ADVOCATE REVENUE BY : S HRI R.N.SIDDAPPAJI, ADDL.CIT DATE OF HEARING : 2 4 - 0 7 - 2019 DATE OF PRONOUNCEMENT : 31 - 07 - 2019 O R D E R PER BEENA PILLAI, JUDICIAL MEMBER : PRESENT APPEALS HAS BEEN FILED BY ASSESSEE FOR ASSESSMENT YEAR S 2010 - 11 AND 2011 - 12 AGAINST ORDER DATED 31/01/19 PASSED BY LD. CIT (A) - 5, BANGALORE. REVENUE ALSO FILED APPEAL FOR ASSESSMENT YEAR 2013 - 14 AGAINST ORDER DATED 31/01/19 PASSED BY LD. CIT (A) - 5. ITA NOS.597, 598 & 772(B)/20 19 2 GROUNDS OF APPEAL ALLEGED BY PARTIES IN ASSESSMENT YEARS UNDER CONSIDERATION ARE AS UNDER: ITA NO.597/BANG/2019 ( A Y : 2010 - 11) (BY ASSESSEE) ADDITION OF RS. 80,60,146/ - TO THE BOOK PROFIT: 1.THE ORDER PASSED UNDER SECTION 154 IS BAD IN LAW AS THE LEARNED ASSESSING OFFICER HAS NOT GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH SUB SECTION 3 OF SECTION 154 OF THE INCOME TAX ACT, 1961. 2.THE ORDER PASSED UNDER SECTION 154 IS BARRED BY LIMITATION UNDER SUB SECTION 7 OF SECTION 154 WHICH IS SERVED ON YOUR APPELLANT ON 1 - 04 - 2017'. 3.THE HONORABLE COMMISSIONER OF INCOME TAX(APPEALS) HAS WRONGLY STATED THAT THE ASSESSEE HAS NOT PRAYED FOR THIS GROUND INDEED WHO PRAYED TO QUASH THE ORDER WHICH IS NOT GIVEN AN OPPORTUNITY OF BEING HEARD AND ALSO BARRED BY LIMITATION ACT. 4.THERE IS NO MISTAKE APPARENT FROM RECORD SINCE ASSESSMENT ORDER IS PASSED UNDER SECTION143 (3) AFTER DETAILED SCRUTINY OF RECORDS OF THE COMPANY. 5. THE ASSESSEE CONTEND ED THAT SECTION 14A OF THE ACT COULD NOT BE READ IN SECTION 115JB, AS SECTION 115JB IS A COMPLETE CODE IN ITSELF AND OVERRIDES ALL OTHER PROVISIONS OF THE ACT. TAX LIABILITY UNDER SECTION 115JB OF THE ACT WAS TO BE WORKED OUT ONLY ON THE BASIS OF ADJUSTED BOOK PROFIT AND NOT ON THE BASIS OF INCOME COMPUTED UNDER NORMAL PROVISIONS OF THE ACT. THE ITO CANNOT GO BEYOND AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE WHILE COMPUTING BOOK PROFITS UNDER SECTION 115JB. BASED ON THE MATCHING PRINCIPLE OF ACCOUNTANCY, ONLY EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT THAT HAD DIRECT AND PROXIMATE NEXUS WITH THE EXEMPT INCOME CREDITED TO THE PROFIT AND LOSS ACCOUNT SHOULD HAVE BEEN ADDED BACK WHILE COMPUTING BOOK PROFIT UNDER MAT PROVISIONS. APPLICABILITY OF SECTION 1 4A IS CONFINED TO COMPUTATION OF TAX LIABILITY UNDER THE FIVE HEADS OF INCOME UNDER NORMAL PROVISIONS CONTAINED IN CHAPTER IV OF THE ACT. SECTION 14A COULD NOT BE EXTENDED AND READ INTO SECTION 115J FALLING UNDER CHAPTER - XII - B OF THE ACT. ITA NOS.597, 598 & 772(B)/20 19 3 6. THE ASSESSE E RELIED ON THE DECISION OF THE DELHI HIGH COURT (HC) IN THE CASE OF BHUSHAN STEEL LTD., WHEREIN IT WAS HELD THAT DISALLOWANCE UNDER SECTION 14A READ WITH SECTION 8D MADE BY THE ITO CANNOT BE ADDED WHILE COMPUTING BOOK PROFIT UNDER MAT PROVISIONS. 7. ON THE SECOND ISSUE, THE ASSESSEE, CONTENDED THAT WHILE CONSIDERING THE AVERAGE VALUE OF INVESTMENT, ONLY THOSE INVESTMENT WERE TO BE CONSIDERED THAT HAVE YIELDED EXEMPT INCOME AND NOT THOSE INVESTMENTS THAT DID NOT YIELD ANY EXEMPT INCOME DURING THE YEAR. TH E ASSESSEE RELIED ON CATENA OF DECISIONS, INCLUDING THE DECISION OF THE JURISDICTIONAL HC IN THE CASE OF HOLCIM INDIA, WHEREIN IT HAS BEEN HELD THAT UNLESS AND UNTIL THE ASSESSEE HAS ACTUALLY EARNED INCOME DURING THE RELEVANT YEAR AND THAT DOES NOT FORM PA RT OF THE TOTAL INCOME, SECTION 14A OF THE ACT, WOULD HAVE NO APPLICATION. 8. DISALLOWANCE OF EXPENDITURE CANNOT BE ADD TO BOOK PROFITS AND THE ACTION TAKEN BY THE LEARNED AO IS CONTRARY TO THE PROVISIONS OF SEC.115J OF INCOME TAX ACT, 1961. 9. WITHOUT PR EJUDICE TO THE FOREGOING SUBMISSIONS, THE LEARNED AO ERRED IN ENHANCING THE INTEREST U/S 234B BY AN AMOUNT OF RS.25,21,064/ - FOR WHICH NO JURISDICTION HAS BEEN PROVIDED IN THE ORDER NOR THE CIT(A) HAS CONSIDERED THE PLEA OF AMOUNT OF INTEREST CHARGED UNDER SECTION 234B. THUS THE CIT(A) ERRED IN CONFIRMING THE ARBITRARY AND EXCESS INTEREST CHARGED UNDER SECTION 234B OF RS.25,21,064/ - 10. THE LD. AO ALSO ERRED IN ENHANCING THE INTEREST LEVIED UNDER SEC.234C FROM RS.22,47,961/ - TO RS.22,81,617/ - AS THE ADDITI ON WAS ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S 14A TO THE BOOK PROFIT. 11. THE LD. AO HAS ALSO ERRED IN ADDING THE REFUND OF RS.4,26,586/ - WHICH HAS NOT BEEN RECEIVED BY YOUR APPELLANT. 12. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR MODI FY ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL, JUSTICE AND FAIRNESS THE APPELLANT WOULD AS IN DUTY BE BOUND AND BEHOLDEN AND PRAY FOR IN LAW. ITA NO.598/BANG/2019 (AY : 2011 - 12) (BY ASSESSEE) ITA NOS.597, 598 & 772(B)/20 19 4 ADDITION OF RS. 3,00,77,709 / - TO THE BOOK PROFIT: 1. THERE IS NO MISTAKE APPARENT FROM RECORD SINCE ASSESSMENT ORDER IS PASSED UNDER SECTION143 (3) AFTER DETAILED SCRUTINY OF RECORDS OF THE COMPANY. 2. THE EXPENDITURE, WHICH IS DISALLOWED U/S 14A OF THE ACT, CANNOT BE MADE ADDITION TO BOOK PROFITS AND THE ACTION TAKEN BY THE LEARNED ASSESSING OFFICER IS CONTRARY TO THE PROVISIONS OF SEC 115JB OF INCOME TAX ACT, 1961. 3. THE ASSESSEE CONTENDED THAT SECTION 14A OF THE ACT COULD NOT BE READ IN SECTION 115JB, AS SECTION 115JB IS A COMPLETE COD E IN ITSELF AND OVERRIDES ALL OTHER PROVISIONS OF THE ACT. TAX LIABILITY UNDER SECTION 115JB OF THE ACT WAS TO BE WORKED OUT ONLY ON THE BASIS OF ADJUSTED BOOK PROFIT AND NOT ON THE BASIS OF INCOME COMPUTED UNDER NORMAL PROVISIONS OF THE ACT. THE ITO CANNO T GO BEYOND AUDITED FINANCIAL STATEMENTS OF THE ASSESSEE WHILE COMPUTING BOOK PROFITS UNDER SECTION 115JB. BASED ON THE MATCHING PRINCIPLE OF ACCOUNTANCY, ONLY EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT THAT HAD DIRECT AND PROXIMATE NEXUS WITH THE EX EMPT INCOME CREDITED TO THE PROFIT AND LOSS ACCOUNT SHOULD HAVE BEEN ADDED BACK WHILE COMPUTING BOOK PROFIT UNDER MAT PROVISIONS. APPLICABILITY OF SECTION 14A IS CONFINED TO COMPUTATION OF TAX LIABILITY UNDER THE FIVE HEADS OF INCOME UNDER NORMAL PROVISION S CONTAINED IN CHAPTER IV OF THE ACT. SECTION 14A COULD NOT BE EXTENDED AND READ INTO SECTION 115JB, FALLING UNDER CHAPTER XII - B OF THE ACT. 4. THE ASSESSEE RELIED ON THE DECISION OF THE DELHI HIGH COURT (HC) IN THE CASE OF BHUSHAN STEEL LTD. WHEREIN IT WAS H ELD THAT DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D MADE BY THE TO CANNOT BE ADDED WHILE COMPUTING BOOK PROFIT UNDER MAT PROVISIONS. 5. ON THE SECOND ISSUE, THE ASSESSEE CONTENDED THAT WHILE CONSIDERING THE AVERAGE VALUE OF INVESTMENT, ONLY THOSE INVEST MENTS WERE TO BE CONSIDERED THAT HAVE YIELDED EXEMPT INCOME AND NOT THOSE INVESTMENTS THAT DID NOT YIELD ANY EXEMPT INCOME DURING THE YEAR. THE ASSESSEE RELIED ON CATENA OF DECISIONS, INCLUDING THE DECISION OF THE ITA NOS.597, 598 & 772(B)/20 19 5 JURISDICTIONAL HC IN THE CASE OF HOLCIM IN DIA, WHEREIN IT HAS BEEN HELD THAT UNLESS AND UNTIL THE ASSESSEE HAS ACTUALLY EARNED INCOME DURING THE RELEVANT YEAR AND THAT DOES NOT FORM PART OF THE TOTAL INCOME, SECTION 14A OF THE ACT WOULD HAVE NO APPLICATION. 6. THE LEARNED ASSESSING OFFICER ALSO ERRED IN CHARGING THE INTEREST UNDER SECTION 234C, 244A AND 234DOF RS. 3,23,100/ - , RS. 3,95,497/ - AND RS. 5,70,384/ - RESPECTIVELY AS THE ADDITION WAS ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S 14A TO THE BOOK PROFIT, HENCE YOUR APPELLANT WAS NOT LIABLE FOR I NTEREST SECTION 234C, 244A AND 234D. WE REQUEST YOUR GOOD SELF TO QUASH THE ORDER U/S154. 7. 'THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR MODIFY ANY OF THE GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. YOUR APPELLANT PRAYS FOR THE DELE TION OF THE DISALLOWANCE OF EXPENDITURE U/S 14A OF RS.3,00,77,709/ - WHICH WAS ADDED TO THE BOOK PROFITS BY THE LEARNED ASSESSING OFFICER WHICH IS CONTRAVENTS THE PROVISIONS OF SEC 115JB. YOUR APPELLANT ALSO PRAYS FOR THE REDUCTION OF THE INTEREST UNDER SE CTION 234C AND GRANT OF INTEREST UNDER SECTION 244A. THE APPELLANT WOULD IN GREAT EARNESTNESS PRAY THAT THE HONORABLE INCOME TAX APPELLATE TRIBUNAL BE PLEASED TO DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER TO MAT INCOME, WITH CONSEQUENTIAL RELIEF I N THE ENDS OF JUSTICE AND EQUITY FOR WHICH ACT JUSTICE AND FAIRNESS THE APPELLANT WOULD AS IN DUTY BE BOUND AND BEHOLDEN AND PRAY FOR IN LAW ITA NO.772/BANG/2019 (A Y : 2013 - 14) (BY R EVE NUE) THE REVENUE HAS RAISED THE FOLLOWING GROUNDS AS UN D ER; 1. THE ORDER OF THE LD. CIT(A) OPPOSED TO LAW AND FACTS OF THE C A SE. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS RIGHT ON TATTING THAT HARVESTING CHARGES PAID TO LABOURERS BY THE APPELLANT ON BEHALF OF THE CANE GROWERS IS PART AND PARCEL OF THE COST PRICE OF THE SUGAR AND THE PAYMENT OF WHICH CANNOT BE STATED TO BE COVERED WITHIN THE EXPRESSION WORK CONTRACT A DEFINED U/S 194C, WHEN ITA NOS.597, 598 & 772(B)/20 19 6 ASSESSEE HAS SUBMITTED THAT THESE LABOU RERS ARE ENGAGED BY THE FARMERS FOR HARVESTING ACTIVITY. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED UPON AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LD.CIT(A) IN SOFAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE AO MAY BE RESTORED. 4. THE APPELLANT REQUESTS LEAVE TO ALTER, AMEND OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE AND/OR ADD ANY NEW GROUNDS ON OR BEFORE THE HEARING. IT IS OBSERVED THAT FOR ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 , ASSESSEE RAISED COMMON A DDITIONAL G ROUNDS AS UNDER: 1. THE AUTHORITIES BELOW ERRED IN LAW IN NOT APPRECIATING THAT THE RIGOURS OF SECTION 14A OF THE ACT ARE NOT ATTRACTED WHEN NO E XE MPT INCOME IS E ARNED DURING THE YEAR AND ACCORDINGLY, THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT IS NOT SUSTAINABLE IN LAW ON THE FACTS AND CIRCUMSTANCES OF THE CAS E . 2. THE AUTHORITIES BLOW FAIL E D TO APPRECIATE THAT IT IS SETTLED POSITION IN LAW THAT CONSENT CANNOT CONFER JURISDICTION, HENCE THE IMPUGNED ORDER PASSED IS BAD IN LAW AND VOID AB INI TI O ON THE FACTS AND CIRCUM S T A NCES OF THE CASE. 3. THE APPELLANT CRAVES LEAVE OF THIS HONBLE TRIBUNAL, TO ADD, ALTER, DELETE O AMEND OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL AS MAY BE NECESSARY AT THE TIME OF HEARING. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL C AUSE OF JUSTICE AND EQUITY. IT HAS BEEN SUBMITTED BY BOTH SIDES THAT FACTS FOR ASSESSMEN T YEAR 2010 - 11 AND 2011 - 12 ARE IDENTICAL AS LD.AO IN ORDER PASSED UNDER SECTION 154 OF THE A CT, WHEREIN ADDITION TO BOOK PROFITS W AS MADE AS PER 14 A DISALLOWANCE COMPUTED BY AO IN ASSESSMENT ORDER. ITA NOS.597, 598 & 772(B)/20 19 7 BRIEF FACTS OF CASE FOR ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 ARE AS UNDER: 1. F OR ASSESSMENT YEAR 2010 - 11, ASSESSEE FILED ITS RETURN OF INCOME ON 14/10/10 DECLARING TOTAL I NCOME OF RS.17,40,98,760/ - . LD. AO OBSERVED THAT ASSESSEE HAD INVESTMENT OF RS.15.72 C RORES IN EQUITY SHARES AND ACCORDINGLY DETERMINED DISALLOWANCE UNDER SECTION 14A READ WITH R ULE 8D AT RS. 80 ,60, 146/ - . 2. FOR ASSESSMENT YEAR 2011 - 12 ASSESSEE FILED ITS RETURN OF INCOME ON 28/09/11 BY CLAIMING LOSS OF RS.( - )3,59,45,254/ - . HOWEVER, LD.AO DID NOT COMPUTE DISALLOWANCE FOR ASSESSMENT YEAR 2011 - 12 UNDER SECTION 14 A READ WITH R ULE 8D OF THE A CT. 3 . FOR BOTH YEARS UNDER CONSIDERATION, SUBSEQUENTLY ASSESSMENT ORDER WAS REVISED UNDER SECTION 154 OF THE ACT, BY INCLUDING1 4 A DISALLOWANCE FOR COMPUT ING OF BOOK PROFIT UNDER SECTION 115 JB. AGAINST COMPUTATION DETERMINED BY LD.AO REGARDING BOOK PROFITS, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A), WHO UPHELD THE SAME. AGAINST ORDER OF LD. CIT (A) ASSESSEE IS IN APPEAL BEFORE US NOW. 4. THE P RELIMINARY ISSUE RAISED BY ASSESSEE IN A DDITIONAL G ROUND , IS REGARDING COMPUTATION OF 14 A DISALLOWANCE, WHEN THERE IS NO EXEMPT INCOME EARNED BY ASSESSEE D URING YEARS UNDER CONSIDERATION. PLACING RELIANCE UPON THE DECISION OF DELHI HIGH COURT IN CASE OF CHEMINVEST VS CIT REPORTED IN 378 ITR 33, LD. AR SUBMITTED THAT SECTION 14 A WOULD TRIGGER ONLY ITA NOS.597, 598 & 772(B)/20 19 8 WHEN THERE IS AN Y EXEMPT INCO ME EARNED BY ASSESSEE DURING YEAR UNDER CONSIDERATION. 5 . HE PLACED RELIANCE UPON DECISION OF COORDINATE BENCH OF THIS T RIBUNAL DATED 15/12/17 , IN CASE OF WINDSOR GARDENS P RIVATE LIMITED VS DCIT IN ITA NO. 722/BANG/2017 WHEREIN , SAME ANALOGY HAS BEEN APPLIED FOR COMPUTATION OF BOOK PROFIT. ASSESSEE PLACED RELIANCE UPON DECISION OF SPECIAL BENCH IN CASE OF ACIT VS VIREET I NVESTMENT (P) LTD REPORTED IN (2017) 82 TAXMANN.COM 415 . 6. LD.SR DR THOUGH SUPPORTED ORDERS PASSED BY AUTHORITIES BELOW , COULD NOT CONTROVERT AFORESATTED OBSERVATIONS AN D DECISIONS RELIED UPON BY LD.AR. 7. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. ADMITTEDLY , THERE IS NO EXEMPT INCOME EARNED BY ASSESSEE DU RING YEARS UNDER CONSIDERATION. UNDER SUCH CIRCUMSTANCES, THE RATIO THAT NO DISALLOWANCE CAN BE COMPUTE D UNDER SECTION 14 A READ WITH RULE 8D , SHALL APPLY WHILE COMPUTING BOOK PROFITS U/S115JB . IT IS OBSERVE D THAT T HIS T RIBUNAL IN CASE OF WINDSOR GARDENS P RIVATE LIMITED VS DCIT (SUPRA) , APPLIED SAME ANALOGY FOR COMPUTING BOOK PROFIT UNDER SECTION 115 JB EXPLANATION 1 CLAUSE (F). RESPECTFULLY FOLLOWING SAME , WE DIRECT LD. AO TO DELETE THE ADDITION MADE ON ACCOUNT O F DISALLOWANCE UNDER SECTION 14 A WHILE COMPUTING BOOK PROFITS. ACCORDINGLY GROUNDS RAISED BY ASSESSEE IN THESE APPEALS STANDS ALLOWED. ITA NOS.597, 598 & 772(B)/20 19 9 8. THE A DDITIONAL G ROUND RAISED BY ASSESSEE IS IN RESPECT OF DISALLO WANCE COMPUTED UNDER SECTION 14 A OF THE ACT , AS THERE IS NO EXEMPT INCOME EARNED DURING THE YEAR. IT IS OBSERVED THAT ASSESSEE RAISED THIS ISSUE IN AN APPEAL AGAINST ORDER PASSED UNDER SECTION 154, WHERE ADDITION HAS BEEN MADE TO T HE BOOK PROFITS OF ASSESSEE FOR YEARS UNDER CONSIDERATION. AS ORDER PASSED UNDER SECTION 143(3) OF THE A CT BY LD. AO IS NOT BEFORE US TODAY . ACCORDINGLY, THESE ADDITIONAL G ROUNDS THOUGH , ARISING OUT OF ASSESSMENT PROCEEDINGS , DESERVES TO BE ADMITTED HOWEV ER STANDS DISMISSED AS NOT ARISING OUT OF THE ORDER PASSED BY LD. CIT (A) IMPUGNED BEFORE US. ACCORDINGLY WE DISMISS ADDITIONAL GROUNDS RAISED BY ASSESSEE FOR THE YEARS UNDER CONSIDERATION. IN THE RESULT APPEALS FOR ASSESSMENT YEAR 2010 - 11 AND 2011 - 12 F ILED BY ASSESSEE STANDS PARTLY ALLOWED. ITA NO. 772/BANG/2019( A Y: 2013 - 14 ) 9. GROUNDS RAISED BY REVENUE ARE RESPECT OF OBSERVATIONS MADE BY LD.CIT (A) REGARDING APPLICABILITY OF 194C IN RESPECT OF CHARGES PAID TO LABOURERS BY ASSESSEE. 9.1 IT HAS BEEN SUBMITTED BY LD.DR THAT ASSESSING OFFICER MADE DISALLOWANCE OF EXPENDITURE PERTAINING TO HARVESTING TRANSPORTATION CHARGES OF RS.72,07 , 202/ - BY HOLDING THAT ITA NOS.597, 598 & 772(B)/20 19 10 TD S UNDER SECTION 194C HAS NOT BEEN DEDUCTED WHILE PAYING TO FARMERS. HE SUBMITTED THA T LD. CIT (A) FOLLOWED VIEW ADOPTED BY HIS PREDECESSOR FOR ASSESSMENT YEAR 2011 - 12, AN D DELETED ADDITION MADE BY LD . A O. LD.DR PLACED RELIANCE ON DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF RYATOR SAHAKAI SAKKARE KARKHANE NIYAMIT VS ACIT REPORTED IN (2016) 67 TAXMANN.COM 283 IN SUPPORT OF HIS CONTENTIONS . 9.2 WHEREAS , LD.AR SUBMITTED THAT THESE PAYMENTS WERE ACTUALLY PART AND PARCEL OF SUGAR CANE PURCHASE COST A ND SAID CHARGES WERE DULY DEDUCTED BY ASSESSEE FROM SUGAR CANE PAYMENTS MADE TO FARMERS W H O SUPPLIED SUGAR CANE TO ASSESSEE. IT WAS SUBMITTED THAT ASSESSEE PAID TO THE HARVESTER ON BEHALF OF FARMER AND THEREFORE, WAS NOT LIABLE TO DEDUCT ANY TDS. LD. AR SUBMITTED THAT , ALL RELEVANT BILLS IN RESPECT OF SAME WERE FURNISHED BEFORE AUTHORITIES BELO W WHICH WERE VERIFIED BY LD.CIT (A). HE SUBMITTED THAT THE DECISION OF HONBLE KARNATAKA HIGH COURT HAS BEEN REVERSED BY HONBLE SUPREME COURT WHICH IS REPORTED IN (2019), 105 TAXMANN.COM 3 WHEREIN HONBLE COURT REMANDED ORDER OF HONBLE KARNATAKA HIGH COURT FOR HEARING AFRESH. 10. WE HAVE PERUSED SUBMISSIO NS ADVANCED BY BOTH SIDES IN LIGHT OF THE RECORDS PLACED BEFORE US. I T IS OBSERVED THAT , ISSUE INVOLVED IN RYATOR SAHAKAI SAKKARE KARKHANE NIYAMIT VS ACIT (SU P RA) IS IDENTICAL TO THAT RAISED BY REV E NUE IN PR ESENT APPE A L . LD.AR PLACED BEFORE US DECISION OF HONBLE SUPREME COURT IN RYATOR SAHAKAI SAKKARE KARKHANE NIYAMIT VS ACIT (SUPRA). AS THE VIEW OF HONBLE KARNATAKA HIGH COU RT, STANDS ITA NOS.597, 598 & 772(B)/20 19 11 REVERSED BY HONB L E SUPREME COURT . ADMITTEDLY, IDENTICAL ISSUE FOR ASSESSMENT YEAR 2011 - 12 HAS NOT BEEN RAISED BY REVENUE, MEANING THEREBY, VIEW ADOPTED BY LD. CIT (A) STANDS ACCEPTED AS ON DATE. IT IS OBSERVED THAT FOR YEAR UNDER CONSIDERATION, LD.CIT(A) FOLLOWED THE VIEW O F HIS PREDECESSOR TO ALLOW CLAIM OF ASSESSEE. WE DO NOT FIND ANY INFIRMITY IN THE VIEW ADOPTED BY LD.CIT(A). ACCORDINGLY GROUNDS RAISED BY REVENUE STANDS DISMISSED . IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 - 07 - 2019. SD/ - SD/ - (B.R.BASKARAN) (BEENA PILLAI) ACCOUNTANT M EMBER JUDICIAL MEMBER DATED: THE 31 ST JULY, 2019. *AM COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6. ITO (TDS) 7.GUARD FILE BY ORDER ASST.REGISTRAR